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Citi Sees Gold At $2500 In Six Months…”And it’ll outperform other assets for years”

Citi FX analyst Tom Fitzpatrick is bullish on gold, and he thinks the shiny yellow metal could be on the cusp of a big rally heading into 2013.

In a note to clients today, Fitzpatrick compares the rally he sees coming to gold’s big breakout move higher in 2007:

That was the start of a 6 month acceleration higher in Gold that saw it rally 60% (Low to high) and over 50% on the break.

A similar move here would suggest as high as $2,450-2,500 by the end of Q1, 2013.

Ultimately we still believe that this trend could end up giving us a similar percentage move to that seen in the 1970-1980 bull market…with one caveat.On 24 December 1979 Russia invaded Afghanistan and we saw Gold spike aggressively over the following 4 weeks into the trend high. While such a spike is not impossible it would be imprudent at this point to expect such an aggressive outcome.

As a consequence we look to the bull trend replicating the percentage move (Low to high) seen up to Dec 21,1979 (Before the invasion) which would suggest an ultimate peak closer to $3,400-3,500.